Running Head: The facts concerning Financial Intermediaries
Financial Intermediaries Paper
University of Phoenix
FIN/320 Corporate Finance
August 18, 2008
Introduction
This paper will be discussing the role that financial intermediaries play in the domestic financial system. This paper will explain the links between the banks and the Federal Reserve, and how they are interlinked with the flow capital.
Role of Intermediaries
Strong and active financial institutions and intermediaries play an important role when organizations are trying to show a economic opportunity. Organization tries to provide financial support, which can offer can offer a valuable perspective on market and business operations in support of development. Financial institutions often provide technical assistance to small businesses, training to prospective homeowners, and financial education to residents about the economy. It helps in international and cross border flow of capital and credit, gives opportunities to the business, government and other institutions to access to the international markets Financial institutions play a major part in liquidity redistribution and maturity transformation, the implementation of monetary policy, in operating payment systems and in providing appropriate channels for national and international financial flows, which contribute to the overall development of the economy (I.M. Pandey 2007, p.65).
Financial institutions can provide lending facilities and help businesses in crisis. They can also make major contributions to financial stability:
1. By continuing to make every effort to improve risk management
2. By transferring know-how and strengthening corporate governan ...